Amazon has made it official: Prime Day will return on July 11 and 12 this year. But the real bargain may already be available. Bank of America’s trading desk studied the pattern of Amazon’s shares in the days leading into the sales event, and found it can be positive for the stock. After crunching the numbers, consumer sector specialist Michael Dick said Amazon gained as much as 14.8% in the 13 days before the promotions. Those who purchased shares in the five days prior realized a gain of as much as 7.6% in recent years, he said. Most analysts see room for Amazon stock to run, despite its nearly 50% year-to-date gain. According to FactSet, 91% of analysts rate the dominant e-commerce platform a buy, with an average price target of $137.54. Based on Tuesday’s close of $125.78, that leaves about 9% upside for the stock if it hits the average target. Jefferies analyst John Colantuoni on Wednesday raised his price target on the stock to $150 from $135. “We believe upside to consensus (JEFe FY24 EBITDA is 8% above consensus) combined with positive sentiment from AI will help AMZN shares to re-rate,” he said, referring to higher price-to-earnings multiple. Colantuoni added that the stock has already benefited from the rise of artificial intelligence, which has boosted usage at its Amazon Web Services unit. “While AMZN lags its mega-cap peers in generative AI capabilities today, the AI opportunity remains early, and we expect AMZN’s rich history of innovation will help them close the AI gap over time,” Colantuoni said. On Tuesday, JPMorgan analyst Doug Anmuth reiterated Amazon as his “best idea,” saying he expects it to pass Walmart as the largest U.S. retailer in 2024 as it expands deeper into categories such as consumer packaged goods, apparel, furniture and appliances. Amazon began the Prime Day event in 2015 as a way to boost its Prime membership, and has held it annually ever since. Last year, it began a new tradition by adding a second bargain bonanza to the autumn calendar in the run up to winter holiday season. Rivals like Walmart and Target have tended to announce their own competing deal days, adding excitement to an otherwise slow time for retailers. So far, Target has announced its own event, which will run from July 9-15. On Wednesday, Amazon shares were trading down more than 1% after the Federal Trade Commission announced a lawsuit against the company, alleging “deceptive” sales tactics tied to the Prime program. A Prime membership costs about $139 a year and includes perks like free shipping and access to Amazon’s streaming service. The FTC alleges some subscribers unintentionally signed up for Prime and it was very complicated to cancel the membership.
Bank of America says Amazon shares follow a clear upward pattern heading into Prime Day
